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Four timely questions about supermarket health boom

The growth of health and wellness efforts at mainstream retail has been phenomenal over the past few years, and supermarkets are working hard to keep the momentum going.

But growth has been the only sure thing. How it’s accomplished has been a moving target and there are many questions about the outlook.

Many in the industry in March will visit Natural Products Expo West, the giant annual exhibition and educational event in Anaheim, Calif. In light of this, I’ve chosen to address four key questions about the future of health and wellness at retail.

1. Will the growth pace continue to keep up for mainstream retailers?

All signs point to yes. In SN’s annual health and wellness survey, 75% of retailers and wholesalers said sales in this segment have increased in the past 12 months. More than 40% of retailers/wholesalers said sales have grown 10% or more, which represents an unmistakably “healthy” direction.

2. Does gluten free still have legs?

That’s a central question because of its strong success and skepticism by some about its longevity. However, this trend shows no signs of slowing down. Asked to rate the top wellness trend of 2013, 40% of retailers and wholesalers pointed to gluten/allergen free, which was more than double the 16.3% that pointed to organic. Further, gluten-free foods was cited as the trend with the highest level of consumer awareness.

3. Are retailers and suppliers on the same page about health and wellness trends?

Not necessarily. Our survey shows they both agree it’s a primary business direction, but they differ on which are the most important aspects. While suppliers and retailers both identify gluten/allergen free as a top trend, retailers and wholesalers (40%) are more likely to cite it as the strongest trend, compared to suppliers (23.6%). Similarly, while both said they sell or purchase local products, that is much more the case with retailers/wholesalers (84.6%) than manufacturers (49.4%).

4. Which retail channel is the strongest competitor to supermarkets in this segment, and what is its most important advantage?

Natural food stores were identified in our survey as the most formidable competitor, and by far the biggest reason cited was the selection of products. That will continue to be an important point for supermarkets to consider when battling both smaller natural food stores and the new breed of “supernaturals,” which include Sprouts Farmers Market.

Related to that last point, supernaturals will be among the topics addressed at a half-day education and networking event that SN is presenting Thursday, March 6, during Natural Products Expo West (SN and Expo West are both part of Penton). The program is called “Supermarket News at Expo West: Driving Health and Wellness at Supermarkets.” Speakers will include executives from Ahold USA, IGA, Sprouts Farmers Market, Fresh Thyme Farmers Market, Unified Grocers, D&W Fresh Market and others.

We hope to see you there, and we plan to bring you lots more coverage of this lucrative but fast-changing business segment in 2014.